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Japan developers may cancel 70% of solar on rules, BNEF says

Friday, May 27, 2016 - 14:01

As much as 70 per cent of the solar capacity already approved by Japan's government to receive preferential rates but not yet started may never get built because of a recent law change in Japan, according to estimates by Bloomberg New Energy Finance.

PHOTO: REUTERS

[TOKYO] As much as 70 per cent of the solar capacity already approved by Japan's government to receive preferential rates but not yet started may never get built because of a recent law change in Japan, according to estimates by Bloomberg New Energy Finance.

The Ministry of Economy, Trade and Industry has approved about 75 gigawatts of solar projects of 10 kilowatts or larger since the start of an incentive program for clean energy in July 2012. Of that capacity, about 53 gigawatts has yet to come online, according to the ministry.

Japan's parliament passed legislation this week to overhaul the incentive program. Under the new rule, projects that have already been given approval will be canceled if the developer fails to secure a grid connection by March 31.

The change was brought in because of a growing backlog of solar projects.

BNEF estimates 37.2 gigawatts will be called off because of the law revision, according to a report released Friday.

Some 81 per cent of projects of 2 megawatts or larger, or 22.2 gigawatts, face cancellation, according to BNEF. For projects below 50 kilowatts, 51 per cent of approved projects will be canceled, totaling 13.2 gigawatts.